Cryptocurrencies’ long road to recovery took a positive step this week, as bitcoin’s newfound stability resonated with the broader market. BTC clocked highs north of $7,100 on Wednesday, having recovered roughly $1,200 from its recent low. The leading digital currency has faded somewhat in the latter half of the week but continues to show signs of a bullish breakout, based on the technical charts.
On the adoption front, Yahoo Finance rolled out trading with three cryptocurrencies, giving laypeople easier access to bitcoin, Ethereum and Litecoin. Meanwhile, mobile payment processor Square secured a patent with the U.S. Patent and Trademark Office to develop a new cryptocurrency payment network.
Bitcoin’s $7,000 Test
Bitcoin is on track for a 6% gain this week, offering compelling evidence that the worst of the August bear market had passed. The leading digital currency first crossed $7,100 on Tuesday and continued on to fresh three-week highs on Wednesday. In doing so, BTC crossed the overbought threshold on the RSI, sending prices back down to the $6,800 range. It was there that bitcoin’s price found support near the 200-day moving average, based on the 4-hour chart.
Looking ahead, bitcoin is generating positive price action, with the 50-day moving average inching closer to the 200-day MA. A crossover could generate additional bullish momentum in the near term.
At current values, bitcoin is capitalized at $120 billion, which represents 53.3% of the entire cryptocurrency market.
Yahoo Finance Integrates Three Cryptocurrencies for Trading
Yahoo Finance this week integrated three cryptocurrencies into its online trading platform, a move that could hasten adoption of digital assets at the retail and institutional levels.
In addition to looking up vital statistics, users can now buy and sell bitcoin, Ethereum and Litecoin on the Yahoo Finance platform. Although the announcement flew under the radar of major news outlets, its significance cannot be overstated. That’s because Yahoo Finance is the most popular personal finance website in the United States, based on monthly visits.
According to Statista, the website received 70 million visitors during the month of May, well ahead of MSN MoneyCentral, CNN Money and Google Finance. Sites like Motley Fool and Investopedia receive only a fraction of Yahoo Finance’s monthly visits.
Square Secures Patent
Mobile payments processor Square Inc. has secured a new patent that would allow merchants to accept payments in cryptocurrencies, possibly opening the door to wider acceptance of digital assets.
Square, which filed the patent in September 2017, was approved by the U.S. Patent and Trademark Office to begin developing the new system. To be sure, the patent is not just crypto focused but allows merchants to accept payments in any currency, including bitcoin and altcoins.
“The disclosed technology addresses the need in the art for a payment service capable of accepting a greater diversity of currencies … including virtual currencies including cryptocurrencies (bitcoin, ether, etc.)… than a traditional payment system in a transaction between a customer and a merchant, and specifically for a payment service to solve or ameliorate problems germane to transactions with such currencies,” the patent said.
Stocks Forge Ahead
U.S. stocks are rounding out their best August since 2014 thanks to strong earnings, pro-growth optimism and signs of easing trade tensions with China.
The S&P 500 Index returned to record highs for the first time since January, culminating in the longest bull market in U.S. history. The Nasdaq Composite Index also traded at fresh records, while the Dow notched new seven-month highs.
Wall Street and global stocks continue to trade in the opposite direction, as emerging-market risks weigh on key markets in Asia and Europe. All of Europe’s benchmark indexes registered heavy losses for the month of August, with the Euro Stoxx 50 Pr falling 3.5%. Mainland China’s CSI 300 Index plunged 5.2%.
The Week Ahead
Bitcoin’s road to recovery will likely see better days in the near future as the market shakes off its bearish bias. Activity in the futures market, coupled with the sharp decline in volatility, suggests that the worst may be over for the leading digital currency. However, investors shouldn’t expect linear gains quite yet.
Over time, August and September have been the worst months for stocks. Although Wall Street defied the August trend, a repeat performance in September will be more difficult to justify as trade volumes return to normal. The Federal Reserve’s rate-hike path is sure to spook some investors at a time when home sales are crumbling.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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